A taxable Canadian corporation acquires pick-up trucks for short-term lease (not exceeding 30 days in any 12-month period) to lessees for personal use or transporting goods or equipment to earn income, or as described in clauses (e)(iii)(A) and (B) of the s. 248(1) automobile definition. Although the pick-up trucks fall within para. (d) of the automobile definition, can they be included in Class 16 since they also may potentially fall within para. (e) of the definition? CRA responded:
Subparagraph (e)(i) of Class 16 generally applies to motor vehicles that are automobiles and are intended for short-term rental purposes. …
Subparagraph (e)(ii) of the definition of automobile refers to pick-up trucks and/or vans the use of which, in the taxation year in which they are acquired or leased, are all or substantially all for the transportation of goods, equipment or passengers in the course of gaining or producing income.
In this case, where it can be established that the pick-up trucks the use of which, in the taxation year in which they are acquired or leased, are all or substantially all for the transportation of goods, equipment or passengers in the course of gaining or producing income, the CRA will be of the view that the pick-up trucks are motor vehicles described in subparagraph (e)(ii) of the definition of automobile to be included in Class 10.